I think what we’re doing now will either fail, or it will result in unbelievably high inflation – and tragically, maybe both. That would mean a depression and explosive inflation, which is frightening.

German Chancellor Angela Merkel, in a rare public rebuke of central banks, suggested the European Central Bank and its counterparts in the U.S. and Britain have gone too far in fighting the financial crisis and may be laying the groundwork for another financial blowup.

You are going to have to get used to the fact that you will have to spend a greater proportion of your income on food in the future – after decades of spending less.
That's according to Joakim Helenius, chairman of Trigon Agri, an integrated soft commodities producer in the Ukraine and Russia. He believes that food inflation has only just started – and he is not alone.
Commodities perma-bull Jim Rogers thinks people should not buy shares – he says they should buy commodities instead, especially agricultural commodities.
"I can think of very few industries in the world where the fundamentals are getting better. But the fundamentals of commodities are getting better, full stop," Rogers told CNBC last month.
The price of most commodities has jumped significantly this year, as the global economy slowly stutters toward recovery.
Gains in oil and metals prices may not have much further to go but many believe that the situation with food is different.
Soybean f

Sure the economy is in bad shape. And sure the powers that be are only making things worse. But sooner or later Americans, who are increasingly aware of both facts, will force a change of course and then, finally, we will see a recovery.

The Los Angeles Times, New York Times, Washington Post, and the Wall Street Journal continue to lead with the nationalization of General Motors. When the automaker filed for Chapter 11 protection yesterday morning, it "became the second-largest industrial bankruptcy in history," notes the WSJ. President Obama marked the moment "by barely mentioning it," points out the NYT, instead choosing to focus on how filing for bankruptcy will give GM another shot at survival. Some Republican lawmakers were quick to criticize the Obama administration's decision to infuse more than $50 billion in taxpayer money into the automaker and called it another example of the deepening involvement of the government in the private sector. Others were skeptical that so much money was given "to a company lacking an answer to its most profound problem: how to get more car buyers to choose its cars and trucks," notes the LAT. Some members of Obama's party, particularly from i

The real estate market's troubles are hitting close to home for Treasury Secretary Timothy Geithner.
After reducing the price on his house in a tony New York City suburb to less than he paid for it, Geithner still couldn't sell and recently rented it out instead, according to real estate agents familiar with the deal.

The Federal Reserve appears to be increasingly nervous about the long term bond market. This is serious. How panicked are they? After leaking a story on Friday, they are back at it on Sunday.
The Federal Reserve leaked to CNBC's Steve Liesman on Friday that they weren't targeting long rates. Why such a leak?

The massive federal bailout of U.S. financial firms reflects everything that’s wrong with the economic system of welfare and interventionism under which the United States has operated since at least the 1930s. There are critically important lessons in the bailout that the American people ignore at their peril. While most politicians and mainstream pundits are viewing the bailout as a necessary “reform,” it is imperative that we place this “reform” in a much wider and deeper context. In doing so, we need to return to first principles.

The Federal Reserve appears to be increasingly nervous about the long term bond market. This is serious. How panicked are they? After leaking a story on Friday, they are back at it on Sunday.
The Federal Reserve leaked to CNBC’s Steve Liesman on Friday that they weren’t targeting long rates. Why such a leak? Probably because the Fed did not want to appear impotent in controlling the long rate. So they put out the word through Liesman that they weren’t targetting the long rate. Can you imagine what would happen to the markets if it sensed long rates were beyond the control of the Fed?
The Fed can of course print money to buy up every Treasury bond in existence, but the inflationary ramifications would be Zimbabwe like, and crush the dollar on international currency markets. Are we near the phase where all hell breaks loose? I have never even answered, maybe, to this question before. It’s always been, “no.” Now it’s maybe.
What really has me spooked is another article out this a

General Motors Corp. has sold its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Co. Ltd., according to a report Tuesday in the New York Times. The report cited a person familiar with the Chinese government approval process.

Maybe the state borrowed money from China for two years back in 2007 and now has to borrow again to give the Chinese their money back. What happens if, seeing the catastrophic budget situation, lenders decide to shun California altogether?

You may not think it, the way we are told of the failure of the mega banks and industries, but we are.....rich.
Americans, Middle Americans are working, making money, paying debts and living their lives of foolish stupidity. This is beca

Citigroup's run of ignominy has now come to this: losing its coveted spot in the Dow Jones industrial average to a former unit. Dow Jones Indexes said the property and casualty insurer Travelers will replace Citigroup in its flagship 30-stock index of blue-chip stocks, effective June 8.

Commercial property values have fallen 30 percent to 40 percent from their peak a couple of years ago and the market is fraught with peril. Loan defaults have soared. Financing has dried up. Rising vacancy rates combined with declining rents are weakening cash flow.

This is it. After months of speculation, General Motors will file for Chapter 11 bankruptcy early this morning. The iconic automaker, which was once seen as synonymous with American capitalism and only 10 years ago was the world's largest company, will be nationalized. The United States will invest $30.1 billion in the company, on top of the $20 billion it has already spent on propping up the automaker. The Los Angeles Times points out that GM will now be "the second-largest recipient of bailout money, behind insurance giant American International Group." USA Today notes that GM, unlike Chrysler, will not announce a companywide plant shutdown. Under the current restructuring plan, the U.S. government would get about 60 percent of the new GM, the governments of Canada and Ontario would get 12 percent, 17.5 percent would go to a union retiree-health trust, and bondholders would get 10 percent. The Washington Post devotes much of its piece to looking, once again, at how the

DETROIT—As community leaders and members of the press looked on, Detroit mayor David Bing proudly hurled the first brick this week in a window-shattering ceremony for the city's newest dilapidated slum.
The result of three years of construction work and more than $24,000 in public funds, the rat-infested and crime-ridden development was unveiled to the public on Tuesday.
"It is my great honor to introduce to you the brand new Baneberry Heights," announced Bing, gesturing to the ramshackle subdivision behind him. "Filthy, dangerous, filled with violence and blight: It's all here, and it's all completely falling apart."
Enlarge Image Slum
"This is what the people of Detroit have been waiting for," Bing continued before walking to a nearby trash can, setting its contents on fire, and heaving the flaming receptacle through a corner storefront. "Baneberry Heights is a nightmare come true."

Timothy Geithner's first trip to China as treasury secretary comes at a vulnerable time for the Obama administration.
Mired in a brutal recession, the United States needs Beijing to buy more American goods, allow its currency rise and make other moves to narrow an enormous trade gap. The U.S. also needs China's help to confront any military threat from North Korea.
Yet Washington's leverage has waned just as China's power over the U.S. has grown.
China is now America's biggest creditor. As of March, it held $768 billion of Treasury securities — about 10 percent of publicly traded debt.
The U.S. needs China's money to finance U.S. budget deficits, which are soaring as Washington tries to end the recession and bolster the banking system. The administration estimates the budget deficit will hit $1.84 trillion this year. That's four times last year's deficit.

GM has bowed to the inevitable and is passing through bankruptcy. I want you to think about that. Six months ago, a portfolio top heavy with financial service companies and GM was about as conservative as you could make an investment portfolio. And the supply was large enough to satisfy all comers. Most of this stock was all lodged in managed pension plans and the like because the managers did not dare show that they were accepting excessive risk. If I had held their positions, I would have been very satisfied following suite. I would have slept well at night and perhaps fretted about that small cap flyer in the discretionary part of the portfolio.

We have Uncle Sam owning hundreds of billions of dollars worth of preferred stock in banks around the nation. And giving them long term calls on common stocks of these same banks - the distinction between public and private ownership is quickly slipping away.

Because the expected commercial real-estate crash is still gathering momentum, a number of notable Phoenix-area projects have gone into receivership in recent months. Those include Wigwam Golf Resort and Spa in Litchfield Park; Century Plaza high-rise...

Over half of the companies listed on the Dow Jones Industrial Average, were formed during a recession or depression. Likewise an astonishing number of products were invented during a recession of depression. These economic periods are truly the mothers of invention. However, this time the federal government is stifling all that innovation and creativity.

Some cities — Las Vegas, Phoenix, Fort Myers are good examples — hitched their floats to housing bubbles and got caught up in development that depended largely on, well, development itself, rather than sustainable, scalable, productive industry...